The One Big Beautiful Bill Act was signed on July 4, 2025. For solar developers and owners, the most immediate change is a new termination schedule for the Clean Electricity Production Credit (PTC) under Section 45Y and the Clean Electricity Investment Credit (ITC) under Section 48E.
Two dates now shape the project schedule
The termination provision applies to wind and solar facilities that begin construction after July 4, 2026. For those facilities, the Section 45Y or 48E credit is unavailable if the project is placed in service after December 31, 2027.
That creates two dates that must be evaluated together. The project team needs a defensible beginning-of-construction position and a schedule capable of reaching placed-in-service status by the end of 2027. A development schedule that once had room for extended interconnection, permitting or procurement delays may no longer have the same tax-credit outcome.
Later guidance narrowed the available test
IRS Notice 2025-42 generally requires projects to use the Physical Work Test to establish that construction began before July 5, 2026 for purposes of this termination rule. The Five Percent Safe Harbor remains available for certain low-output solar facilities with maximum net output of no more than 1.5 MW AC, subject to the notice's aggregation and continuity rules.
Storage is treated differently
The wind and solar termination language does not terminate the Section 48E credit for qualifying energy storage technology. A storage system located at a solar facility still requires its own eligibility analysis, but it is not swept into the same termination rule solely because it is installed with solar.
Sourcing restrictions start earlier
The law also added prohibited-foreign-entity restrictions to Sections 45Y and 48E. The material-assistance provisions apply to facilities and energy storage technologies beginning construction after December 31, 2025. Those rules create a separate sourcing analysis in addition to domestic-content bonus requirements.
For projects moving through development, the practical response is to align tax credit planning with procurement and schedule control. Teams should identify the work used to establish beginning of construction, confirm whether any low-output exception applies, document equipment sourcing before orders are released, and test whether the construction schedule still works under the new dates.
What owners and developers should track
- The date and method used to establish beginning of construction;
- The placed-in-service schedule and the risks that could move it;
- Equipment sourcing and supplier certification requirements;
- Whether storage is treated as a separate eligible investment; and
- The effect of any schedule change on the financial model and credit transfer strategy.
For teams with projects in the pipeline, this is less about memorizing two deadlines than understanding which projects still have room to move. The earlier schedule, sourcing and tax strategy are reviewed together, the fewer surprises show up after development capital has already been committed.